Policy & Regulation
Polestar barred from selling new vehicles in the U.S.
Polestar is effectively barred from selling new vehicles in the U.S. due to the "Connected Vehicle Rule," though it will continue supporting existing stock.
On Thursday, Swedish electric vehicle manufacturer Polestar announced that it will no longer be able to sell its new cars in the U.S. market. The company is effectively barred from selling new vehicles in the country following a decision by the Trump administration’s Department of Commerce—the US government agency responsible for trade and regulation—to deny the company’s request for special authorization. The refusal falls under the administration’s so-called “Connected Vehicle Rule,” which is a policy restricting cars with Chinese software or hardware from being sold in the U.S. Polestar had requested a special authorization from the regulator to sell its vehicles in the U.S., but the Department of Commerce refused to grant the authorization.
Polestar is owned by the Chinese automotive giant Geely. The Department of Commerce’s decision highlights a regulatory divergence within the same parent company’s portfolio. While Polestar’s request was rejected, its sibling company Volvo—which is also owned by Geely—was granted authorization by the Trump administration to sell its vehicles in the U.S. market. This decision to effectively ban Polestar from the U.S. market comes just a few months after the Trump administration granted the same authorization to Volvo, drawing a line between how different brands under the same Chinese parent company are treated under the Connected Vehicle Rule.
Despite the restriction on new vehicle sales, Polestar stated that it will continue selling its existing stock of Polestar 3 and Polestar 4 vehicles in the U.S. market. The manufacturer also committed to continue supporting its customers, which includes providing access to its service network. However, the regulatory barrier is prompting a shift in the company’s geographic priorities. Polestar pointed out in a press release that 94% of its retail sales volume in the first quarter of 2026 came from markets outside the U.S. With the U.S. market effectively closed to new models, the company announced it is now “increasing its strategic focus on Europe.”
Why it matters
The Trump administration’s refusal to authorize Polestar to sell new vehicles in the U.S. under the “Connected Vehicle Rule” creates a significant market barrier for the Chinese-owned manufacturer, while its sibling company Volvo retains authorization.